4th Circuit Rules No Recovery Under Privacy Act for Disclosure of SSNs Without Showing of Actual Damages

September 20, 2002. The U.S. Court of Appeals (4thCir) issued its split opinion [48 pages in PDF] in Doe v. Chao, holding that a plaintiff must prove actual damages to recover under the Privacy Act for improper disclosure of Social Security Numbers by the federal government.

Background. The Department of Labor adjudicates coal miners' black lung compensation claims. The DOL used applicants' social security numbers (SSNs) as its claim identifying numbers. The DOL and its administrative law judges disclosed SSNs in public documents.

District Court. Various black lung claimants filed complaints in the U.S. District Court (WDVa) against the Secretary of Labor (Elaine Chao is the current Secretary) alleging violation of the Privacy Act, 5 U.S.C. § 552 et seq, and violation of a right to privacy under the Constitution. Plaintiffs also sought class certification. The District Court consolidated the various cases. The DOL stipulated that it would stop its practice of publicly disclosing SSNs, and the District Court so ordered. The District Court held that actual damages are necessary to recover statutory damages under the Privacy Act, and that only one plaintiff had done so, by proving emotional distress. It granted summary judgment to the DOL as to all but one plaintiff (Buck Doe), denied the remaining plaintiffs' motion to amend the complaint to allege actual damages, and denied class action certification. The District Court also ruled for the DOL on the Constitutional claim. The black lung claimants appealed. The DOL cross appealed the emotional distress ruling as to Buck Doe.

Statute. 5 U.S.C. § 552a(g)(4) provides, in part, that "In any suit brought under the provisions of subsection (g)(1)(C) or (D) of this section in which the court determines that the agency acted in a manner which was intentional or willful, the United States shall be liable to the individual in an amount equal to the sum of (A) actual damages sustained by the individual as a result of the refusal or failure, but in no case shall a person entitled to recovery receive less than the sum of $1,000; and" costs and attorneys fees.

Appeals Court. The Court held that "a person must sustain actual damages to be entitled to the statutory minimum damages award."

The Court wrote that while Buck Doe had sworn in an affidavit that he was "embarrassed", "degraded", and "devastated", by the disclosure of his SSN, this was insufficient to raise an issue of fact. He did not allege the requisite manifestations of emotional distress, such as "medical or psychological treatment", "purchase of medications", and "physical consequences". The Court concluded that "because Buck Doe utterly failed to produce evidence sufficient to permit a rational trier of fact to conclude that he suffered any ``actual damages,´´ the district court's entry of summary judgment in Buck Doe's favor as to his entitlement to a statutory ``actual damages´´ award must be reversed, and we must remand with instructions to enter summary judgment in favor of the Government on his claim."

The Appeals Court further affirmed the District Court's denial of the motion to amend pleadings, and the denial of class certification.

The Appeals Court also affirmed the District Court's ruling on the Constitutional claim. It held that since the DOL stated that it would stop its practice of publicly disclosing SSNs, the issue was moot. The Court held that "no further effective relief can be given".

Judge Karen Williams wrote the opinion. Judge Michael Luttig joined. Recent press reports have speculated that Judge Luttig is on President Bush's short list of prospective nominees for the next opening on the Supreme Court.

Dissent. Judge Blane Michael wrote a 30 page dissent. He wrote that he disagreed with the majority's conclusion "that only a plaintiff who can prove actual damages is entitled to recover statutory damages under 5 U.S.C. § 522a(g)(4)." He wrote that "I would hold that proof of actual damages is not a prerequisite for the recovery of statutory damages under § 522a(g)(4)(A). A plaintiff who proves that he has suffered an adverse effect as a result of an agency's willful or intentional violation of the Act is entitled to the statutory damages remedy. A plaintiff may, of course, recover any proven actual damages in excess of $1,000."

He advanced three arguments in support of his interpretation of the statute. "First, Congress created the statutory damages remedy as an incentive to suit because it recognized that damages from government invasions of privacy are hard to prove. Second, Congress recognized that the typical injury caused by the invasion of privacy is emotional distress. Third, Congress intended for the statutory damages remedy to be available to plaintiffs who suffered even very minor harms as a result of the government’s intentional or willful invasion of their privacy."

However, Judge Michael concurred with the majority on the other issues on appeal.